Bonus pay for employees of Texas topped $25 million in ’08

Bonus pay for state workers risesFigure topped $25 million in 2008

By Peggy Fikac |
February 23, 2009

AUSTIN — State government workers were awarded more than $25 million in bonuses and extra compensation in 2008, with the best of it going to Texas executives and university employees, state payroll records show.

More than 14,000 state employees received some form of extra payment, according to a newspaper analysis, mostly dubbed “merit” and “performance” pay or sometimes folded into regular salaries.

Given the faltering economy, the practice of bonus payments promises to trigger intense scrutiny, especially from legislative budget writers.

The issue came to the forefront last month when an eye-popping $1 million payment to the chief investment officer at the University of Texas Investment Management Co. sparked a fiery legislative hearing that culminated in the resignation of a university regent.

“The rank and file out here have a legitimate complaint,” said state Sen. Steve Ogden, R-Bryan, who chairs the Senate Finance Committee. “On the one hand, they’re being told that times are tough and your salaries are low and going to stay that way. And then they see a selected few, for reasons that aren’t readily apparent, basically, earning windfalls.”

Most of the bonuses to state workers average about $1,500, while some executives at state agencies and higher-education institutions get 10 to 100 times that, records show.

At several universities and colleges, bonuses ranging from $10,000 to $180,000 have already been paid, or will be paid, according to the payroll records and budget documents.

The Texas A&M University System has budgeted $45,000 for several executives, and more than 50 top employees at M.D. Anderson Cancer Center are in line to receive performance or merit bonuses this fiscal year. The payments range from $9,000 to $36,000.

Extra compensation in 2008 also included payments of $5,000 to 375 employees at various agencies. Dozens of others received payments of more than $10,000.

The payments, categorized as base salary, appeared in much-larger-than-usual monthly paychecks in December.

Trust CEO Paul Ballard, for example, was paid an average $17,000 a month from January to November. In December, his pay showed an $88,000 monthly payment.

Combs declined to answer questions. Her spokesman, Allen Spelce, said the payroll increases should have been classified as bonuses. He said the employees were rewarded for managing a state investment pool that made more than $900 million in 2008.

A number of state senators also have given their senior staffers scores of temporary pay increases, effectively issuing bonuses totaling more than $650,000, records show.

Ogden was one of the few in the 31-member body that did not.

Much of the bonus money for state employees, however, was paid as one-time merit increases that lawmakers approved during the last legislative session.

“They send out a strong signal from management about what’s important in the organization,” he said.

Bonuses sometimes are paid on the basis of a performance evaluation, a subjective process that can cause “ill feelings and distrust and friction,” said Mike Gross, vice president and organizing coordinator with the Texas State Employees Union.

Outside of higher education, the median state salary in 2008 was $33,000, payroll records show.

“When you’re struggling just to feed your family, and your pay has been stagnant or losing ground for two decades, and then you see people getting bonuses that are as much as your whole annual paycheck, it’s irritating,” said Gross, whose union represents more than 14,000 employees.

Ogden voiced a similar sentiment.

“The jury’s still out on whether it does any good or not, but it’s not always harmful and so I’m willing to try to accommodate those people who think it’s helpful,” he said.